The Ohio Supreme Court on Tuesday, Jan. 26, upheld decisions by the Public Utilities Commission of Ohio which allowed natural gas utilities to increase the monthly flat-fee amount that they charge customers for distribution of the fuel.

The court’s 7-0 decision upheld the PUCO’s 2008 rulings in favor of Duke Energy Ohio and Dominion East Ohio. Before 2008, part of the natural gas distribution fee that the utilities collected depended on how much gas a customer used, meaning that the amount collected would drop if consumption declined.

Consumer advocates challenged the PUCO’s decisions, contending that the new billing method removed an incentive for customers to reduce natural gas consumption.

The utilities said that increases in the fuel’s cost typically prompt customers to reduce consumption. The PUCO concluded that the utilities needed the assurance of stable revenues to cover their fixed costs and ensure that they could continue to provide safe and reliable service.

Vectren Energy Delivery of Ohio was not directly involved in the court case, but Vectren has used a similar billing procedure since February 2009.

Vectren and the PUCO said they were pleased by the court’s ruling. The commission-approved change more accurately reflects the utilities’ costs of distributing natural gas to customers, PUCO spokesman Matt Butler said.

Consumer advocates also argued that by moving to a larger flat fee from the old system of basing the distribution charge in part on how much gas is used, the PUCO’s rulings would force low-income customers to pay more for distribution and, in effect, have them subsidize high-volume gas users. The court disagreed, citing PUCO findings that the costs of distributing gas to customers is largely the same regardless of how much gas each customer uses.